Swiss regulation does not make any provisions on the subject.
In order to ensure an orderly market in certain financial instruments, European regulation introduces a compulsory tick size regime across the EU. The targeted harmonization of tick sizes shall mitigate in particular the risks associated with ever-decreasing tick sizes for shares, depositary receipts and certain types of ETFs.
With respect to non-equity financial instruments and fixed income products, a large proportion of trading is executed using different trading methodologies and the regulation of the market via a mandatory tick size regime is not necessary. All other instruments are therefore exempted from this provision.
The general approach is to align all trading segments to the new MiFID II tick size tables (where applicable). We will keep flexibility for either cross-listed products as well as products that do not fall under the new regime according to MiFID II. Exact details of how this will be implemented are still under evaluation.
|SSX trading segments||Tick-size table harmonization|
|Equities||Harmonize on MiFID II Tick Table|
|SFS/Secondary Listed Shares||Harmonize on MiFID II Tick Table|
|ETF / ETSF / ETP / SF / IF||Harmonize tick-size table - new!|
|CHF / Non-CHF Bonds||Not applicable - no change|
|Structured Products||Not applicable - no change (percentage-traded instruments) / CHF 0.001 (unit-traded instruments: - new!)|
|Service / venue|
|SLS||Mid-Point Execution - tick dependant on the primary market of the instrument which is going to change in some cases.|
|SCB||Not applicable - no change|
|XBTR||Not applicable - no change|
|SwissAtMid||Mid-Point Execution - no change|
We believe the approach outlined is aligned to the principles of EU law but is subject to regulatory approval. Implementation is scheduled for SMR7 (2017)
Q: What is expected to change for equity tick sizes?
A: With the application of the new tick bands from MiFID II, there are expected to be changes in tick size to the majority of instruments in our main SMI index. In some cases, there will be a change of two bands for a number of instruments. Details of this will be published later in 2017, but a large number of changes are expected. All tick sizes will continue to be published in the daily RDI reference files as today.
Q: When will the new tick sizes come into force and be communicated?
A: The new tick sizes will come into place from the 3rd of January 2018, and will be present in the RDI file from that date. Communication of the new tick sizes is hoped to be carried out by mid Q4 2017 to members.